Inflation rose more than expected in August even as prices moderated from four-decade highs reached earlier this year.
The Consumer Price Index (CPI) in August reflected an 8.3% increase over last year and a 0.1% increase over the prior month, the Bureau of Labor Statistics reported Tuesday. Economists had expected prices to rise 8.1% over last year and fall 0.1% over last month, according to estimates from Bloomberg.
On a “core” basis, which strips out the volatile food and energy components of the report, prices rose 6.3% over last year and 0.6% over the prior month in August.
Expectations were for a 6.1% annual increase and 0.3% monthly increase in core CPI.
The unexpected rise in Tuesday’s headline figure came despite a 5% drop in energy prices over the month, driven by 10.6% plunge in the gasoline index.
Inflationary pressures remained strong across other components of the report, with declining gas and energy prices offset by increases in the costs of shelter, food, and medical care – the largest of many contributors to the broad-based monthly increase, per the Bureau of Labor Statistics.
The reading likely affirms that Federal Reserve officials will raise interest rates by 75 basis points at their policy-setting meeting
Click here to read the full report from Alexandra Semenova at Yahoo Finance.